On Patents

Patents drive me crazy.

While on the one hand, they protect the intellectual property of a company or individual, on the other hand, they are completely ruining the technology industry. Instead of spending time innovating, and building systems for the betterment of our society, companies are embroiled in litigation with each other over incredibly vague and abstract patent concepts, and are thereby blocking a lot of incredible opportunities for innovation.

I think the patent system needs to be reinvented. Here’s how I think it should work:

The first person or company to submit a valid patent (the current rules on this are okay*) on intellectual property should be awarded the patent.

*However, patents should not be awarded purely on design unless the design is critical to the functionality (such as a particular shape that allows a function to work). In essence, technology patents should be on function, not form.

The patent should immediately apply for 3 years if it’s related to a physical product or hardware (a tangible item).

The patent should immediately apply for 2 years if it’s a business concept or software product. Basically, if it’s an intangible or semi-tangible idea.

Now, here’s where it needs to be very clear:

If the intellectual property (IP) is usable and complete (ie, a fully drafted model for intangibles, or a working prototype for tangibles), then the patent should extend for a base period of, say, 50 years.

However, if during that time the IP fails to procure revenue, fails to make it to market, or fails to become publicly available in any manner, the patent should only apply for a maximum of 10 years.

If it’s a tangible patent (product or hardware) but the IP owner has not yet built a prototype or physical product, the patent should apply for only 3 years.

If it’s an intangible patent (concept, model or software), and the patent owner has not yet produced a working model or usable product from it, the patent should apply for 2 years.

In effect, on those latter two, if you secure a patent, but fail to produce anything under that patent, the patent should be revoked after 3 years for tangible items, 2 years for intangible. However, there should then be a grace period after that, to be fair for things like economic conditions that make the 2-3 year period reasonable:

The patent should remain vague on public records (a description without full IP details) for a maximum of 2 years after being awarded the patent, to give the patent holder a reasonable time to secure a working prototype, if applicable.

For a functional patent (one that applied for 50 years), the patent can simply be renewed, but the above conditions must still be met.

For a functional patent that failed to produce revenue, or for a tangible or intangible patent that never reached a completed state, at the end of the patent period, the patent should be automatically made available for sale, with a price set at 150% of the cost of registering the patent. The patent owner may optionally “repurchase” their own patent.

Any buyer (including the original owner) now has half the time available to fulfill all of the above (except for the 50-year patent, provided the rules are still being met).

The process can repeat until a patent has a 30-day life or less, at which time it becomes void.

And then one additional magic rule:

If you fail to allow your patent to be licensed to any other companies, all of the above times are immediately cut in half at the time you are awarded the patent; whether you are awarded the patent by merely having it approved, or if it’s by purchasing it.

And one exception:

If you are awarded a patent and are then able to license the patent to another company (without producing a tangible product yourself), that company must meet the above conditions (ie, creating a working prototype) in the same timeframe as though they owned the patent themselves. But if the license ends, or if the product doesn’t meet the above criteria, the same timeframes still apply. This prevents someone from securing a license, but then simply never producing anything from it. They would still need to meet the criteria as though they themselves owned the patent.

Basically, this would completely eliminate patent trolls, and would prevent any company from securing a patent and then simply blocking anyone else from implementing it while the owning company or individual simply sits on it waiting to collect money. To ensure that happens, a company would be perfectly free to develop a product that is a complete rip-off of a patent, and then simply wait out the patent’s life and either purchase the patent, or wait until it expires and then produce a working product with no licensing requirements. This gives the owning company or individual time to make their patent usable (hence the brief period where the patent is not publicly available) in order to secure the 50 year patent, or effectively give up their rights to the patent. Meanwhile, another company may steal the idea and owe you no royalties, but really, if you can’t produce a usable product from your patent, you don’t deserve to own it. With the licensing requirement as an option, this ensures that companies who are genuinely interested in the patent will be motivated to license it, rather than risk waiting for it to become void, knowing that a competitor could simply scoop up the patent.

In effect, if you invent a concept for, say, software, but it never sees the light of day, your patent goes up for sale in 2 years. If it fails to sell within 1 year, it becomes void. If it sells, the buying company then has to the end of that 1 year period to produce something usable. If they fail to, the next buying company has 6 months. Then 3 months, then 1.5 months, and then the patent is void. Thus, a software patent that never comes to fruition is void in just shy of four years. With hardware, just shy of six.